Post-translational modification of histone proteins regulates all processes requiring access to DNA. Attachment of the small protein, ubiquitin, to histone H2B is a universal feature of actively transcribed genes and has been proposed to play a role in dynamic changes in chromatin structure. However, a mechanistic understanding of how enzymes regulate this modification, and how attachment and removal of ubiquitin may be coupled to nucleosome dynamics, is lacking. Among many barriers to elucidating how H2B ubiquitination regulates transcription has been the lack of molecular insights into the way that enzymes that regulate this modification engage their nucleosome substrates. Levels of H2B ubiquitination in yeast are regulated by two deubiquitinating enzymes: the four-protein SAGA DUB module, which is part of the 1.9 MDa SAGA transcriptional coactivator complex, and Ubp10, a monomeric enzyme. Although both the DUB module and Ubp10 ostensibly target the same substrate for ubiquitination, deletion of either enyzme has a distinct effect in vivo, suggesting that these enzyme are either targeted to different genomic locations or interact differently with chromatin. In the past funding period, we succeeded in crystallizing the SAGA DUB module - Ubp8/Sgf11/Sus1/Sgf73 - bound to ubiquitinated nucleosomes. We will build upon this accomplishment to address how H2B ubiquitination is regulated and how H2B deubiquitination is coupled to nucleosome dynamics. In Aim 1, we will address how the SAGA DUB module recognizes ubiquitinated nucleosomes by determining the atomic resolution structure of Ubp8/Sgf11/Sus1/Sgf73 bound to ubiquitinated nucleosomes. These results will also provide a foundation for probing how cross-talk with phosphorylation of histone H2A-Y58 regulates DUB module activity in yeast and human cells. In Aim 2, we will determine the mechanism by which Ubp10 specifically engages chromatin and how differences between SAGA DUB module and Ubp10 binding to H2B might underlie their distinct biological functions. In Aim 3, we will explore the role that histone chaperones play in governing the specificity of both Ubp10 and the DUB module for their histone substrates.